Six Sigma Application in Healthcare Logistics: A Framework and A Case Study

Table 2

Proposed framework for applying Six Sigma in healthcare logistics.

Phase	Steps	Description
Define	(1) Fully define the process	This is done by defining the logistics activities performed to obtain the medical product and to ensure its availability, for example, purchasing, transportation, warehousing, and inventory control
	(2) Define the parameters that will be used to assess process performance	Examples of process parameters may include; (i) Average inventory level; (ii) On-time delivery; (iii) Actual time for stock replenishment; (iv) Number of stock-out incidents; (v) Number of expired holding items; (vi) Transporting cost; (vii) Actual time to get product from warehouse or store; (viii) Number of products damaged in handling or delivery; (ix) Volatility and variability of demand; (x) Shelf-life; (xi) Suppliers reliability; (xii) Inventory cost; (xiii) Total logistics cost
	(3) Define the parameters that will be used to assess criticality level of the product	Examples of criticality parameters may include; (i) Product availability at the nearest distributor/manufacturing warehouse; (ii) Time needed to get product from the nearest distributor warehouse; (iii) Number of alternative products in the hospital or local market; (iv) Effect of stock-out incidents or problems caused by stock-out condition
	(4) Define the parameters that will be used to assess product cost level	Examples of cost parameters may include; (i) Purchasing cost; (ii) Ordering cost; (iii) Holding cost; (iv) Transportation cost
	(5) Assess performance, criticality, and cost by process owners or management	(i) Determine current process performance; (ii) Determine current process criticality; (iii) Determine the cost levels with the help from accounting department; (iv) Assess targeted performance, criticality, and cost, and then measure the gap between the current situation and the target (evaluate the F factors); (v) Calculate the Importance Index to select the project with more pain
	(6) Define project goals	(i) Desired improvement to Importance Index value; (ii) Any other ancillary goals
Measure	(1) Map current process	This is a team work that may use some of the following tools: (i) Process flow chart; (ii) Input/output analysis
	(2) Measure performance parameters	(i) Six Sigma project team studies the as-is process and collects performance parameters data; (ii) Plot the collected performance as-is data using simple statistical tools
	(3) Measure criticality parameters	(i) Six Sigma team studies the as-is process and collects criticality parameters data; (ii) Plot the collected criticality as-is data using simple statistical tools∗
	(4) Measure cost parameters	(i) Six Sigma team studies the as-is process and collects cost parameters data; (ii) Plot the collected cost as-is data using simple statistical tools∗
	(5) Calculate Importance Index	(i) Using targeted performance, criticality, and cost, measure the gap between the current situation and the target (evaluate the Fs); (ii) Find the II value by the Six Sigma team and verify the project selected was the right one
Analyse	(1) Improve the process	Carefully observe the as-is process and use value stream analysis to improve it, this may include: (i) Eliminate or minimise non-value added activities; (ii) Develop and apply standards; (iii) Move inspection points forward or eliminate them
	(2) Find root causes affecting criticality, performance and cost	Use tools like Pareto charts or fishbone diagram to determine significant causes responsible for the low performance level, high cost level, and high criticality level
	(3) Develop alternative solutions	Suggest process changes alternatives needed to improve current situation of the criticality, performance, and cost levels
Improve	Implement the new improved process	(a) Study the Importance Index expected enhancement for each alternative; (b) Perform risk analysis for each alternative; (c) Use prioritization matrix to list features of each alternative. Every feature should have weight related to the item’s criticality and cost; (d) Implement the best alternative that will have the largest effect on reducing II
Control	Define and implement controls to guarantee the process will not go back to its unhealthy state.	(a) Write quality manuals; (b) Set key performance indicators to measure performance and a plan to use them; (c) Employees training program to maintain skills and transfer knowledge

Pie chart, histogram, scatter plot, and control chart.